This Week's Caselaw

Sienkiewicz v Grief (UK) Ltd

The unusual features of mesothelioma (see Weekly Update 38/10
for further details) have led to the development of a special test
of causation for the disease (it being impossible for a claimant to
prove causation according to the conventional "but for"
test). The case of Fairchild v Glenhaven [2002] provided a
cause of action "against a defendant who has materially
increased the risk that the claimant will suffer damage and
may have caused that damage, but cannot be proved to have done so
because it is impossible to show, on a balance of probability, that
some other exposure to the same risk may not have caused it
instead" (as per Lord Hoffmann) (emphasis added). In
Barker v Corus [2006] it was established that, where not
all those who were responsible for an employee's mesothelioma
were before the court, only a proportion of the relevant damages
would be recoverable. Section 3 of the Compensation Act 2006
reversed that finding and, as a result, (and on the satisfaction of
certain conditions) an employer who negligently exposes an employee
to asbestos (and is liable by reason of having materially increased
a risk) can be held liable for the whole of the damage even though
another person may also have exposed the victim to asbestos.

Of issue in this case was which causation test applies in a
"single exposure" case (ie the claimant alleges only one
possible tortious source for the asbestos exposure). Is it the
Fairchild test ("materially increased the risk")
or is it the alternative "doubles the risk" test i.e. it
must be shown that the exposure for which the employer was
responsible has more than doubled the environmental exposure (in
this test case, it was proven that the employer had only increased
the exposure which the employee would have otherwise experienced as
a result of environmental exposure to asbestos by 18%).

The House of Lords has unanimously held that the special rule
established in Fairchild applied. There was no room for
the "doubles the risk" approach. This was the case even
though, as Lord Brown recognised, the result is the liability in
full even of someone who is responsible for only a small proportion
of the overall exposure of a claimant to asbestos dust.

Meat Corporation of Namibia v Dawn Meats

Whether expert was independent/disclosure of privileged
information

The claimant sought a direction that permission to call an
expert (sought by the defendant) be refused because she had seen
confidential and privileged information and because she lacked the
necessary independence of an expert. Both sides had tried to
instruct her, and in the course of negotiations, the claimant had
supplied certain materials to the expert, who had then chosen to
act for the defendant. Mann J held as follows:

It was undisputed that the expert had received privileged and
confidential information from the claimant. In the House of Lords
case of Prince Jefri Bolkiah v KPMG [1999], it was held
that accountants who provide litigation support services must
generally be treated in the same way as solicitors and hence have a
duty to preserve confidentiality (including not acting for the
other side). Mann J held that the strict test in Prince
Jefri does not apply just because an expert has received
privileged and confidential information though.
The expert in this case could not be equated with a solicitor. She
had not been engaged to do anything by the claimant - she had
received the information in the course of enquiries as to whether
she would act as the claimant's expert: "to some extent,
the information was pushed on her". The judge also said it was
an "unrealistic parallel" to compare her to professionals
undergoing a "beauty parade" for legal work who commonly
refuse to receive privileged information.

Furthermore, two factors in this case meant that
confidentiality and privilege was likely to be maintained: (a) The
expert had provided an undertaking not to disclose confidential or
privileged material to the defendant; and (b) most of the
disclosure would be irrelevant or "fundamentally
uninteresting" to the defendant. For example, the defendant
already knew about the claimant's offers to it. Although the
claimant's view of the merits of the litigation would be of
interest, that information would be covered by the
undertaking.

Was the expert barred from acting for the defendant? Mann J
held that she was not. The court should not bar an expert just
because he or she has acted for both sides. In this case, the
expert had not even acted for the claimant, but had only discussed
the case with it.

Did the expert lack the necessary independence because she also
acted as a consultant for the defendant? Mann J said this would
depend on all the circumstances of the case and "If the status
of an employee does not automatically disqualify a person as an
expert, then it is even clearer that, by itself, the status of
consultant, providing limited functions for a limited part of the
year, cannot automatically disqualify either. A lot more than that
would have to be established."
In this case, the consultancy was an entirely severable activity.
Although she might discuss the case with the defendant in the
course of her consultancy, that was entirely acceptable. Experts
"do not have to live in some hermetically sealed environment
with resort only to witness statements".

Nor was there any requirement to seek to "ring fence"
the expert. Although there had been an allegation that the expert
had been involved in some of the transactions which were part of
the underlying dispute, that had not yet been proven and the mere
allegation was not enough to disqualify her.

Mann J therefore gave the defendant permission to call the
expert. He did, however, point out that it remained open to the
claimant to challenge the expert's degree of independence in
cross-examination at the trial.

D Sousa v London Borough of Waltham Forest

Whether entitlement to a success fee under a CFA affected by
subrogation

This was an appeal brought by a local authority against the
decision that the respondent was entitled to recover a 100% success
fee under a Collective Conditional Fee Agreement
("CCFA"). Jackson LJ, in his review of Civil Litigation
Costs, criticised the increasing practice of insurers to engage
solicitors under CCFAs to handle recovery actions for costs
incurred in subsidence claims where local authority trees are
implicated as the cause of damage. This was said to be having a
detrimental effect on public finances. However, the Court of Appeal
has dismissed the appeal for the following reasons:

It was clear that the insured was entitled to recover his costs
and those costs could include a success fee. The doctrine of
subrogation does not affect this position. So the CCFA must be
treated as the insured's CCFA and there were no grounds for
saying that it was unreasonable for him to instruct solicitors on a
conditional fee basis.

It was agreed that the court should look at the reality of the
situation, though, and have regard to all the circumstances of the
case. It was therefore necessary to consider whether it was
reasonable for the insurer to enter into the CCFA. Although
sympathetic to the local authority's arguments (for example,
the insured, having been fully indemnified, did not need to protect
himself against any liability for his solicitors' costs), it
was concluded that CFAs are open to all and "if the law
permits it, it must be reasonable for rich as well as poor to take
advantage of that which the law permits". The courts had no
power to force the insurance companies to fund the litigation
themselves.

Bank of Scotland v Pereira & Ors

Interrelationship between application to set aside an order and
an appeal where defendant failed to attend

CPR r39.3(3) provides that "where a party does not attend
and the court gives judgment or makes an order against him, the
party who failed to attend may apply for the judgment or order to
be set aside". In this case, a defendant who had taken no part
in the proceedings sought to appeal against a judge's refusal
to set aside parts of an order against her. She also applied for
permission to appeal out of time against the order itself. The
Master of the Rolls (giving the leading decision in the Court of
Appeal) therefore set out, as part of his decision, six points
"which can at least act as guidelines and would apply in the
great majority of cases" on the relationship between an
application under CPR r39.3 and an attempt to appeal (under CPR
r52):

If a defendant (or claimant, but it will usually be a
defendant) seeks a new trial because he/she did not attend the
trial, he/she should normally proceed under CPR r39.3 (even if
there are other grounds of appeal too).

There is no point in making a CPR r39.3 application, though, if
the defendant has no good reason for not attending the trial and/or
did not make the application promptly. The defendant can still
appeal the order or judgment in the normal way. However, it should
be noted that a defendant who did not attend trial will generally
face additional difficulties in bringing an appeal because (a) the
application for permission to appeal is likely to be made out of
time and (b) it will be hard to persuade an appellate court that
evidence or arguments not raised at trial should be allowed in the
appeal.

Similarly, if a CPR r39.3 application fails, the defendant
still has a right to appeal. However, the appellate court
"should take a great deal of persuading" to depart from
the conclusion reached by the judge who heard the application to
set aside.(Lloyd LJ, dissenting, held that if a defendant's CPR
r39.3 application failed, he/she cannot try again by a direct
appeal (unless appealing against the original order on other
grounds)).

If the defendant's CPR r39.3 application failed because the
arguments on the substantive issues would have had no prospect of
succeeding at any retrial, he/she should not normally be entitled
to raise the same arguments by bringing an appeal against the
decision.

If the CPR r39.3 application fails, a defendant will normally
face severe difficulties in trying to rely on evidence which was
not put before the trial judge or to argue for a retrial (unless
the evidence would not have been available even if he/she had
attended the trial or the application for a retrial was not
dependent on the fact he/she did not attend at trial).

Similar considerations apply where a defendant appeals a trial
judge's decision (and does not make a CPR r39.3 application)
and seeks to put in new evidence or requests a retrial.

On the facts of the case, the Court of Appeal refused the
defendant's applications.

Masri & Anor v Consolidated Contractors International &
Ors

Whether earlier House of Lords decision prevented receivership
order over a third party

Paragraph 19 of the standard form freezing injunction set out in
Appendix 5 of the Commercial Court Guide provides (in relevant
part) as follows: "(1) Except as provided in paragraph (2)
below, the terms of this order do not affect or concern anyone
outside the jurisdiction of this court. (2) The terms of this order
will affect the following persons in a country or state outside the
jurisdiction of this court- (a) the Respondent or his officer or
agent appointed by power of attorney (b)....".

One of the issues in this case was whether the House of Lords
decision in Masri v Consolidated Contractors (No 4) [2009]
affected the question whether an order can be made against a third
party outside the jurisdiction. Masri (No 4) was a
decision on the construction of CPR r71.1 (which provides for a
judgment debtor to be required to attend court to provide
information). It held that this rule did not apply to directors or
officers of a corporate judgment debtor who are outside the
jurisdiction.

However, Gloster J held that the House of Lords had not
considered whether a director or officer out of the jurisdiction
could be liable for contempt of court. There were good arguments
for finding that Masri (No 4) did not apply to
receivership orders or freezing injunctions where the director or
officer is named in the order, not because he is a third party but
because he is the directing mind or controlling organ of the
corporate defendant (and so his acts or omissions count as the acts
and omissions of the company so far as breach of the order/contempt
proceedings are concerned). Although the order is made against the
judgment debtor (in this case) the judicial administrator appointed
over the debtor was being warned that he may be held liable to
contempt proceedings if he procures the judgment debtors to act in
contravention of its terms.

Locke v Stuart & anor

Preparing cases on fraudulent insurance claims

The defendant insurers alleged (and proved) a substantial
fraudulent conspiracy in this case, involving multiple staged road
traffic accidents whereby the conspirators claimed for personal
injury damages (sustained as either passengers or
"innocent" drivers). The case accordingly involved a
factual analysis by the judge, Mr Andrew Edis QC. However, he also
warned that "insurers making allegations of the kind which I
have found proved in this case must do so with care". In
particular, their legal advisers must advance allegations only on
proper grounds. In particular: "I consider it to be
inappropriate for trial bundles to contain the names and personal
details of people with the suggestion that they have been guilty of
fraud unless there are proper grounds evidentially for that
assertion". The case also relied on evidence obtained from
Facebook. The judge noted that a large amount of time in the case
had been taken up with arguments about the strengths and weaknesses
of Facebook evidence and suggested a short document should have
been drawn up summarising those arguments instead.

The English Court of Appeal has considered for the first time in Ted Baker Plc v Axa Insurance UK Plc [2017] EWCA Civ that there are circumstances in which insurance companies will be under a duty to...

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